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CSDDDCurrent scope

CSDDD scope thresholds after Directive (EU) 2026/470

The 2026 amendment materially narrowed scope. Current analysis should not rely on the original EUR 450 million and 1,000-employee general route or the original lower franchise and licensing thresholds.

Test the entity and relevant group for two consecutive financial years, document exclusions, and keep direct legal scope separate from indirect customer or supply-chain requests.

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Author
Sorena AI
Published
Feb 21, 2026
Updated
Jul 31, 2026
Sections
3

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Primary sources
3

Cited legal and guidance references.

Publication metadata
Sorena AI
Published Feb 21, 2026
Updated Jul 31, 2026
Overview

The amended CSDDD covers EU companies above both 5,000 employees and EUR 1.5 billion worldwide , and third-country companies above EUR 1.5 billion net turnover in the Union. An can enter scope on consolidated figures, and a separate higher-threshold franchise and licensing route remains in Article 2.

Section 1

Current threshold routes

Use the legal entity's formation law first. EU entities use employee and worldwide-turnover criteria; third-country entities use Union turnover. Then test the relevant ultimate parent on consolidated figures where Article 2 requires it. Each route applies only after its conditions are met for and ceases only after they are not met for each of the last two relevant financial years.

  • EU company: more than 5,000 employees on average and more than EUR 1.5 billion net worldwide turnover in the last financial year for which annual financial statements have been or should have been adopted.
  • EU ultimate parent: test whether the group had more than 5,000 employees and more than EUR 1.5 billion net worldwide turnover on a consolidated basis, and document control and the consolidation perimeter.
  • Third-country company: more than EUR 1.5 billion generated in the Union in the financial year preceding the last financial year; no employee threshold applies to this route.
  • Third-country ultimate parent: test whether the group generated more than EUR 1.5 billion in the Union on a consolidated basis in the financial year preceding the last financial year.
  • Franchise or licensing route: Union agreements with independent third parties must ensure a common identity, common business concept, and uniform business methods; royalties must exceed EUR 75 million and turnover must exceed EUR 275 million, using worldwide turnover for EU companies and Union turnover for third-country companies.
  • Exclusions: Article 2(8) excludes alternative investment funds () and undertakings for collective investment in transferable securities (). Test a fund manager or another regulated financial undertaking separately rather than treating the fund exclusion as a group-wide exclusion.
Sources for this answer
Directive (EU) 2026/470
Binding source for amended Article 2 scope.
Section 2

Evidence for a defensible scope file

A conclusion should be reproducible by another reviewer. Keep the source version and financial periods beside the figures because the two-year rule means one unusually large or small year does not settle entry or exit.

For the employee test, calculate part-time staff on a full-time-equivalent basis; include temporary agency workers and qualifying non-standard workers; count seasonal workers in proportion to months employed; and include branch employees. Document judgments about worker status instead of relying only on payroll headcount.

  • Legal-entity register, formation jurisdiction, registered office, and group chart.
  • Average employee calculation and treatment of relevant worker categories for each tested year.
  • Worldwide or Union net-turnover reconciliation, currency method, eliminations, and approval evidence.
  • Consolidated accounts and parent-control analysis where group scope is tested, plus the Article 2 holding-company exemption conditions where relevant.
  • Exclusion analysis, reviewer, decision date, next review date, and change triggers.
Sources for this answer
Directive (EU) 2024/1760 read with Directive (EU) 2026/470
Original framework for entity definitions and evidence context; current scope requires the 2026 amendment.
Section 3

What the scope result does and does not mean

An in-scope result leads to national due diligence duties from 26 July 2029 and Article 16 communication for financial years starting on or after 1 January 2030. A below-scope result does not prohibit voluntary OECD-aligned due diligence or proportionate cooperation with an in-scope customer.

Scope should be reassessed after a material entity, group, employee, or turnover change and when national transposition clarifies competent-authority procedures.

  • Label direct CSDDD scope, indirect commercial requests, and voluntary due diligence separately.
  • Do not claim that a supplier is directly covered only because an in-scope customer asks for information.
  • Escalate borderline calculations and parent exemptions for jurisdiction-specific legal review.
Sources for this answer
Directive (EU) 2026/470
Current source for scope, transposition, application, and reporting timing.

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Discuss CSDDD implementation

Review the relevant entity, national-law dependency, evidence gap, and next control decision with Sorena.

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Primary sources

References and citations

Directive (EU) 2026/470
eur-lex.europa.eu
Referenced sections
  • Current source for scope, transposition, application, and reporting timing.
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